As European leaders threatened yet tougher sanctions to punish Russia for its aggressive policies in Ukraine on Monday, Vladimir Putin was thousands of miles away in oil rich east Siberia making friendly with a visiting Chinese official.
“On the whole we are very careful about allowing our foreign partners in, but of course for our Chinese friends there are no limits,” Russia’s president said.
China is emerging as the winner in the Ukraine crisis even as Russia’s relations with the US and the European Union go from bad to worse. It has secured a huge gas deal with Gazprom and is making strides towards greater involvement in the Russian oil and gas production. Continue reading »
Another week and yet another contraction in the consensus for GDP growth in Brazil this year. The central bank’s latest weekly survey of market economists has notched up its 14th consecutive week of falling forecasts and now predicts growth of just 0.52 per cent this year – which may even sound optimistic to some after last week’s figures showing the economy was in recession during the first half. Continue reading »
** FT News **
* Burgers, BMWs highlight N Korea change | From US-style fast food at a showpiece water park to foreign cars on once-empty streets, evidence of informal markets abounds during FT visit to Pyongyang
* Kiev accuses Russia of ‘direct aggression’ | President promises shake-up of Ukraine’s military leadership amid signs that the army has lost ground to Russian-backed separatist forces Continue reading »
Uganda is not, after all, jumping onto Africa’s sovereign bandwagon.
The East African country, a perennial candidate in the continent along with Ethiopia and Algeria to issue dollar-denominated debt, not only says that it is not ready to debut in the global capital markets but has also warned others about the dangers.
Emmanuel Mutebile, governor of the central bank, told The East African newspaper that African countries should “not be complacent about the dangers of big projects built on sovereign debt”, adding that African countries would “never again get debt relief”. Continue reading »
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As the global automotive industry continues its recovery there is particularly bright news for investors in OEMs (original-equipment manufacturers – otherwise known as automakers) that are focused on emerging markets.
The global automotive industry has been more successful than most at producing investor value, says the Boston Consulting Group in a recent report, A Comeback in the Making. Component manufacturers posted a median annual total shareholder return (TSR) – a measure of the value a company creates for its shareholders – of 33 per cent between 2009 and 2013, while OEMs produced a TSR of 29 per cent in the same period. Compare this to a 21 per cent TSR for the 26 global industries tracked by BCG.
But it was carmakers focused on emerging markets that were especially successful at pushing up value for shareholders. Continue reading »
** FT News **
* Nato at odds over response to Russia | Alliance will hope to bridge member states’ divisions with the unveiling of its new ‘readiness action plan’, the result of weeks of detailed negotiation
* Putin seeks ‘statehood’ talks for SE Ukraine | Russia, which annexed Crimea in March, has been calling for the federalisation of Ukraine, since its pro-Moscow president was ousted in February Continue reading »
By Gordon French, HSBC
China has been the growth story of the past three decades. It has also been largely out of reach for portfolio investors. That is about to change.
Shanghai-Hong Kong Stock Connect opens a new chapter in China’s financial integration with the world, and will in time reshape the dynamics of global investment flows.
Expected to launch in October, Stock Connect will for the first time allow mainland Chinese citizens to invest directly in foreign equities, and give global investors direct access to China’s stock market. Continue reading »
Will there be any end to Croatia’s economic travails? The EU’s newest member state has not seen meaningful growth since 2008 and its GDP shrank again in the second quarter, by 0.8 per cent.
It was the eleventh consecutive quarter of contraction, indicative of a deep economic funk upon which EU accession last July has made barely a dent. In need of lasting structural reform, the economy is likely to limp to the end of the year in continued recession. Continue reading »
Brazil’s economy is, by the standard definition, in recession. Its GDP contracted 0.6 per cent in the second quarter from the first, while the first quarter figure was revised to a contraction of 0.2 per cent form the previously reported 0.2 per cent growth.
The year on year figures were even worse: a 0.9 per cent contraction compared with the second quarter of 2013. Still, as Joe Leahy reported for fast FT, employment seems to holding up so the performance of the economy may not completely derail President Dilma Rousseff’s chances of re-election in October. Continue reading »
Few subjects matter more than the future nature of Asia’s economic rise. But what of it’s history? A bumper month of Asian independence days culminates this weekend with the anniversary of Malaysia’s handover from Britain, on August 31 1957. And what better excuse for beyondbrics to run a rule over the dramatically different economic trajectories of a selection of Asian countries that emerged from European colonial rule in the decades following the second world war. Continue reading »
** FT News **
* Nato to hold emergency Ukraine meeting | Rouble falls to a record low as tensions worsen and Russian-backed rebels have been advancing in a new front in the southeast of Ukraine
* Rouble hits record low against the dollar | Russia’s rouble hits a record low against the dollar as the conflict between Moscow and Ukraine intensifies Continue reading »
By Eric Lascelles of RBC Global Asset Management
Globalisation was an unstoppable force over the past quarter century, marked by trade flows that grew at almost twice the clip of the global economy and by surging international capital flows, unleashing a torrent of demand and productive capacity. Emerging markets basked in outsized economic growth and rising standards of living. The developed world benefited from low prices, greater selection and cheap borrowing costs.
Since 2011, however, world trade has suddenly found itself on a much dimmer trajectory, merely matching the rate of global growth. Relative to the pre-2011 trajectory, exports have fallen a whopping $1.4tn behind schedule. Continue reading »
** FT News **
* Obama damps speculation of Syria strikes | President has asked the military to prepare ‘range of options’ against Islamist radicals, with John Kerry soliciting allies in the Middle East
* ‘1,000’ Russia troops in Ukraine, says Nato | Images show Russian units ‘inside Ukraine’, as Poroshenko cancels Turkey visit and demands a UN Security Council meeting to discuss situation Continue reading »
Following her sudden emergence as a potential favourite to win Brazil’s October election, Marina Silva is rapidly coming under greater scrutiny.
In particular, much attention is being directed at her two catch cries. These are that she represents something she calls the “nova política” or “new politics” for Brazil and that she will govern with the support of “os melhores” or “the best” from across the political spectrum, including from the major parties that presently dominate Congress. Continue reading »
Free-trade champion Mexico is on a reform drive that promises new openness in key sectors of its economy, especially energy. So what is it doing slapping protectionist measures on its shoe industry?
Fighting unfair competition from China, officials say.
The raft of new measures to protect Mexico’s industry – which makes 240m pairs of shoes a year – sounds distinctly off message, especially since President Enrique Peña Nieto has made boosting trade ties with China a priority. (He met his Chinese counterpart three times within six months to forge closer relations.) Continue reading »